China Investigating U.S. DDG Imports

China has launched an anti-dumping investigation into U.S. distillers' dried grains (DDGs), threatening rapidly growing exports of the ethanol[3] byproduct to that country.

China's Ministry of Commerce recently said it would probe how much damage the alleged dumping of DDGs had caused to China's own industry from Jan. 1, 2007, to June 30, 2010. China produces about 3.5 million metric tons (mmt) of DDGs per year.

Four Chinese companies, including Anhui BBCA Biochemical Co. Ltd. and Jilin Fuel Alcohol Co Ltd, requested the investigation into imported DDGs between July 1, 2009, and June 30, 2010, the ministry said in the statement.

The Ministry said it would begin the investigation Tuesday and would likely conclude the probe within a year. The probe may be extended under exceptional circumstances to June 2012, it said.

China has become the world's largest importer of DDGs, importing 2.9 mmt between January and November, a 542% increase over the same period in 2009, according to data from China's General Administration of Customs. Nearly all of the DDG imports came from the U.S.

Sources in China say the investigation has more to do with U.S. anti-dumping probes into Chinese exports and escalating trade tensions between the two countries than with actual DDG trade.

The investigation comes after the U.S. last week filed a complaint at the World Trade Organization against China over supports for its wind-energy manufacturers.

U.S. DDG output has expanded rapidly over the past five years along with ethanol production and is expected to hit 34.6 mmt in 2010-2011, up from 10.4 mmt in 2005-2006.